Academic journal article Public Personnel Management

A Comparative Study of Preretirement Programs in the Public Sector

Academic journal article Public Personnel Management

A Comparative Study of Preretirement Programs in the Public Sector

Article excerpt

Preretirement planning programs for public employees are becoming a hot topic for administrators in many governmental agencies. Up to the early eighties employees lucky enough to have such programs considered them an added attraction to their benefits package but did not make an issue of it when programs were not available. Based on current trends however, preretirement planning programs may soon join the list of employee entitlements. Such programs are now mandated by either labor contracts, legislation or official agency policy in more than 25% of public agencies. But this is not the only factor contributing to the growing interest (Siegel & Rees, 1991). There appear to be several other forces at work which are further encouraging organizations to look more closely at the availability and potential effectiveness of preretirement planning programs as part of their overall personnel planning systems:

(1) The "graying of the labor force", in which almost 13 percent of the more than 18 million public employees are estimated to be over the age of 55 (Wood, 1990), is filling organizational pipelines with workers who had traditionally been "ready for" or "shortly approaching" retirement age. With existing and pending legislation aimed at removing most forms of age-based mandatory retirement, a major clogging of career pipelines is already occurring. This could discourage bright young people from seeking careers in the public sector, as well as signal those already employed to start looking elsewhere for greater opportunities. The possibility of ADEA and its associated amendments creating "deadwood" within organizations should not come as a surprise to public administrators. Sullivan (1978) and others raised the issue more than a decade ago.

(2) Slowing of the economy continues to put pressure on public sector agencies to balance budgets and reduce operating expenses by eliminating jobs, not filling vacancies, combining job functions, as well as relying more on part-time employees and contracting for outside services Concurrently, the unprecedented "deficit reduction bill" passed by Congress in October 1990 has unquestionably spurred additional personnel reductions across the board. (The New York Times, October 28, 1990)

(3) Retirement as a normal progression within the life cycle is either being delayed until much later, or in some instances is being postponed indefinitely. The average age of retirement is moving upward. In 1987 it averaged 62 years for employees in the private sector.

Although public employees were retiring at a younger average age of approximately 59 in 1987, the average had increased to over 60 years by early 1989 (Siegel & Rees, 1991). A trend towards later retirement amongst federal employees was reported by Ippolito (1990) to have started as far back as 1970.

Preretirement planning programs, regardless of how good they are, will certainly not be the primary factor in an incumbent's decision to voluntarily vacate any of the blocked positions mentioned earlier. But, research within the private sector (Fretz, et. al., 1989; Levy, 1980; Louchheim, 1990; Mathews & Brown, 1987; Prentis, 1980), suggests there are psychological barriers to proactive retirement decisions which, once removed, could increase the attractiveness of retirement. On a marginal basis, effective preretirement planning programs might serve as an important tool in comprehensive manpower downsizing strategies. The private sector has been studying this strategy for several years and major corporations such as AT&T have included comprehensive preretirement planning programs as an integral part of "early retirement campaigns."

Traditionally, change within the work place has always been the result of social, political and economic forces working together to overcome the resistance to the status quo. It appears that preretirement planning programs are gaining momentum in all three areas and the time has come to take a close look at the extent and scope of preretirement planning programs across all levels of public agencies. …

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